Old vs new regime
Your income tax under both regimes for FY 2026-27, with your actual deductions. For salaried residents.
The new regime saves you ₹83,200
Tax of ₹1,50,800 in the new regime against ₹2,34,000 in the old, on ₹18,00,000 of income. The old regime only wins if your deductions (beyond the standard deduction) exceed ₹6,41,667; you claim ₹3,75,000.
Old regime only
Tax under each regime
The new regime has lower rates and a ₹75,000 standard deduction, but almost no other deductions. The old regime keeps them.
The new regime is cheaper for you.
Line by line
| New regime | Old regime | |
|---|---|---|
| Gross income | ₹18,00,000 | ₹18,00,000 |
| Deductions | ₹75,000 | ₹4,25,000 |
| Taxable income | ₹17,25,000 | ₹13,75,000 |
| Tax on slabs | ₹1,45,000 | ₹2,25,000 |
| Rebate (87A) | ₹0 | ₹0 |
| Surcharge | ₹0 | ₹0 |
| Cess (4%) | ₹5,800 | ₹9,000 |
| Total tax | ₹1,50,800 | ₹2,34,000 |
How this is calculated
New regime slabs: nil to ₹4 lakh, then 5%, 10%, 15%, 20% and 25% for each ₹4 lakh, and 30% above ₹24 lakh. Taxable income up to ₹12 lakh pays nothing (87A rebate), with marginal relief just above it.
Old regime: nil to ₹2.5 lakh (₹3 lakh at 60–79, ₹5 lakh at 80+), 5% to ₹5 lakh, 20% to ₹10 lakh, 30% above. Up to ₹5 lakh taxable pays nothing.
surcharge: 10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr (old: 37% above ₹5Cr)
Rules are for FY 2026-27, unchanged by Budget 2026. Special-rate income (capital gains) isn’t included here, and the deduction caps are applied for you.
This is a guide for planning, not tax advice. Check your final figures with Form 16 or a tax professional.
Frequently asked questions
Which is better, the old or the new tax regime?
The new regime has lower rates and a ₹75,000 standard deduction but almost no other deductions. The old regime wins only if your deductions, such as HRA, 80C, 80D and home loan interest, are large enough; the calculator shows the breakeven amount.
Is income up to ₹12 lakh tax-free in the new regime?
Yes. For FY 2026-27, taxable income up to ₹12 lakh pays no tax because of the Section 87A rebate. For salaried people that means a salary up to ₹12.75 lakh after the ₹75,000 standard deduction. Special-rate income such as capital gains does not get the rebate.
Can I switch between regimes every year?
Salaried people without business income can choose either regime each year when filing. People with business income can switch back to the new regime only once.
Which deductions are allowed in the new regime?
Mainly the standard deduction and the employer’s NPS contribution (up to 14% of basic). HRA, 80C, 80D and interest on a self-occupied home loan are not allowed.